KUKE upholds its existing insurance policy towards Ukraine
Recent political developments in Ukraine resulting from the Russian-Ukrainian confrontation in the Azov Sea have not affected KUKE’s long-term approach to transaction insurance issues between Polish entrepreneurs and their contractors in Ukraine.
KUKE has, for many years − both in the period of Ukraine’s dynamic development and in the many difficult moments that this country has gone through since − been providing trade security and the bank credit arrangement possibilities for investment projects. We are constantly adjusting our risk assessment policy to the dynamically changing situation. Starting from the mass social protests in Majdan in late 2013 and early 2014, we have heightened our information validity and quality requirements, also covering the financial information used in the risk assessment and monitoring process relating to Ukrainian buyers. Looking at our own experience to date and that of our clients, we are also paying particular attention to the payment morality of Ukrainian companies. This approach is working very well in practice, resulting in a low level of claims and, despite the recent developments, allows us to consider the receivables of Polish firms covered by KUKE as safe.
Although we are paying close attention to current developments in Ukraine and not excluding a relevant correction of our policy in the event of a significant escalation of the present crisis, we currently do not see any need to revise our approach to covering export projects relating to sales of capital goods, such as machinery and devices, production lines, means of transport, and construction services. These transactions are usually financed with long-term bank loans with a repayment term of over two years and carry a higher risk than traditional trade receivables insurance. From 2017, the new insurance policy towards Ukraine has opened up greater possibilities of support extended to Polish goods and services exported to our eastern neighbour for investment purposes, which has automatically resulted in a greater number of entered into and ongoing transactions.